10.

International carriers are taxable on their gross income or receipt from

a. Income shipment or flight
b. Outgoin shipment or flight
c. both incoming and outgoing flight
d. Any sources

11. A domestic Carrier is subject to tax on

a. Philippines gross income
b. World gross income
c. Philippine taxable income
d. World taxable income

12. A non-resident lessor of vessels chartered by Filipino nationals is subject to

a. 25% tax on its gross rentals from Filipino nationals
b. 25% tax on its worldwide rental
c. 4.5% tax on it gross from Filipino nationals
d. 7.5% tax on its gross rentals from Filipin worldwide

13. A domestic cinematography film owner, distributors, or lessor is subject to

a. 25% on Philippine gross income
b. 30% tax on global taxable income
c. 25% tax on global taxable income
d. 30% tax on Philippines gross income

14. A non-resident film owner, distributors, or lessor is subject to

a. 25% tax on Philippine gross income
b. 30% tax on globe taxable income
c. 25% tax on global taxable income
d. 30% tax on Philippine gross income

15. A non-resident lessor of aircrafts is subject to

a. 7.5% tax on Philippine gross income
b. 4.5% tax on global taxable income
c. 25% tax on global taxable income
d. 30% tax on Philippine gross income

16. A domestic lessor of aircrafts and other equipments is subject to

a. 4.5% tax on Philippine gross income
b. 30% tax on global taxable income
c. 7.5% taxon global taxable income
d. 30% tax on Philippines

17. An exempt corporation with no taxable income is delinquent in filing its tax
return . Which penalty is it liable to?
a surcharge
b. Interest
C.Compromise
d.All of these

Multiple Choice: Case Problems

Problems 1
Berkshire Corporation reported the following gross income and expensés in 2016:

Philippines Abroad Total

Gross income P 400,000 P 300,000 P700,000
Deductions. 200.000 150.000 350.000
Taxable income P200.000 P150.000 P350,000

Compute the income tax due if the corporation is a/an:

1. domestic corporation
a. P210,000 c. P60,000
b. P120,000 d. P105, 000

2. resident foreign corporation

a. P 60,000 c. P105,000
b. P120, 000 d. P210,000

3. non-resident foreign corporation

a. P210, 000 c. P105,000
b. P120,000 d. P60,000

4. private proprietary educational institution or a non-profit hospital majority of its

income is from related activities

a. P105,000 C. P70,000
b. P35, 000 d. P20,000

5. Government-owned and controlled corporation

a. P105,000 c.. P35, 000
b. P60,000 d. P 0

6. international carrier
a. 105, 000 c. P35, 000
b. P60,000 d. P 0

7. offshore banking unit

a. P105,000 C.P17,000
b. P10,000 d. P5, 000

9. non-resident cinematographic film owner, distributor or lessor

a. P120,000 C. P100,000
b. P87,500 d. P50,000

10. non-resident owner or lessor of vessels

a. P18,000 c. P120,000
b.P31,500 d. P15,750

11. non-resident owner or lessor of aircraft, machineries and other equipment

a. P120,000 c. P30,000
b. P52,500 d. P26,250

2. non-profit association, 60% of its income was derived from unrelated activities
a. P105,000 c. P42,000
b. P63,000 d. P0

Problem 2
Compute the tax due if the corporation is a/an:
1. Regular domestic corporation
a. P90,000
b. P150,000
c. P60,0000
d. P30,0000

2. Proprietary educational institution or non-profit hospital

a. P90,000
b. P60,000
C. P30,000
d. P20,000

3. Exempt non-profit corporation

a. P90,000
b. P30,000
c. P60,000
d. P0

Problem 3

Domestic bank reports the following income from its regular banking (RBU) and foreign currency deposit
unit (FCDU):

RBU FCDU
Interest from lending with FCDUs/0BUs P - P 300,000
Interest from lending to other residents 2, 000,000 3,000,000
Interest from lending to non-residents. 1,000,000 1,500,000
Less: Business expenses 1,800,000 2,000,000
Net income P1, 200,000 P2, 800,000

Answer the following:

1. Compute the total final tax.

a. P500,000
b. P300,000
c. P 390,000
d. P 150,000

2. Compute the regular income tax due.

a. P 750,000
b. P360, 000
c. P 240,000
d.P 60,0000

Problems 4

The following data pertains to a taxpayer:

Philippines Abroad Total

Gross income P 500,000 P 700,000 P 1,200,000
Direct deductions 200,000 300,000 500,000
Common expenses 150,000

Compute the income tax if the taxpayer is a:

1.Business partnership organized in the Philippines

a P71,250
b. P90,000
c. P 165,000
d. P0

2. General professional partnership

a. P165,000
b. P90,000
c. P71, 250
d. 0
3. A joint venture formed for the undertaking of construction projects of the exploration under service
contracts with the government.
a. P165,000
b. P90,000
c. P71,250
d. 0

4. A business joint venture organised in the Philippines

a. P165,000
b. P90,000
c. P71,250
d. 0

5. A co-ownership which is limited to the collection of income and preservation properties co-owned
a. P165, 000
b. P90,000
c. P71,250
d. 0

6. A co-ownership which reinvested the income of the property in other income producing properties
a. P165, 000
b. P90,000
c. P71,250
d. 0

7. Resident foreign corporation

a. P165, 000
b. P90, 000
c. P71, 250
d. 0

8. Non-resident foreign corporation

a. P360, 000
b. P150, 000
c. P90, 000
d. 0

PROBLEM 5

Antarctica, a shipping company, reported to the following gross receipts and deduction during the year:

Shipments

Incoming Outgoing Total

Gross receipts P 2,000,000 P 3,000,000 P 5,000,000
Less: Deductions 1,500,000 2,000,000 3,500,000
Net income 500,000. 1,000,000 1,500,000

Compute the tax due assuming the corporate taxpayer is a:

1. Domestic shipping carrier

a. P30, 000
b. P125, 000
c. P75, 000
d. P450, 000

2. Resident International shipping carrier

a. P450, 000
b. P75, 000
c. P125, 000
d. P30, 000

PROBLEM 6

An air carrier reported to the following for its air transports operations:

DESTINATION FARES

PHILIPPINES-AUSTRALIA P1, 000,000 (1,000 tickets)

AUSTRALIA-PHILIPPINES P1, 250,000 (1,000 tickets)
PHILIPPINES-RUSSIA P2, 000,000 (1,000 tickets)
PHILIPPINES - JAPAN P1, 500,000 (2,000 tickets)

*The fight was referred to another airliner in Japan. The Japanese airliner airlifted passengers for Russia.

Determine the income tax due assuming that the carrier is a/an:

1. International carrier
a. P143,750
b. P112,500
c. P62,500
d. P81,250

2.Domestic carrier with P3,000,000 global expenses

a. P525,000
b. P 825,000
c. P 143,750
d.P 112,500

Problemn 7
PhilTravel is engaged in the business of sea transport. It arranged the transport of various cargoes with a
shipping company to bring the cargöes from the Philippines to Afghanistan for a total charter fee of
P4,000,000.

Compute the income tax on this transaction assuming that the shipping company is a/an:
1.International shipping carrier
a. P300,000
b. P 180,000
c.P 100,000
d. O

2.Non-resident shipping carrier

a. P1,200, 000
b. P 300,000
c. P 180,000
d. P 100,000

Problem 8

A non-profit non-stock school has a gross income of P4,000,000, only 40% of which was contributed by
related activities and total expenses of P3,000,000, 50% of which was incurred in connection with non-
related activities.
1. Compute the total income tax if the income from non-related activities is not using exclusively for
educational purposes.
a. P 300,000
b. P 90,000
c. P 100,000
d. P 270,000

2. In the immediately preceding problem, compute the income tax due if all income of the non-profit
school is used for educational purposes.
a. O
b. P100,000
C. P 270,000
d.P 300,000

3. Compute the total income tax assuming the taxpayer is a non-profit charity institutioon.
a. P270,000
b. P 300,000
c. P 100,000
d. P 90,000

4. Compute the total income.tax assuming the taxpayer is a private school.

a. 100,000
b. 270,000
c. P 300,000
d. P 90,000

5.Compute the income tax assuming the täxpayer is a private hospital."

a. 90,000
b. 270,000
c. P 100,000
d. P 300,000

6. Compute the income tax aśsuming the taxpayer is a non-profit hospital.

a.P 270,000
b. P 300,000
c. P 100,000
d. P 90,000.

7. Compute the income tax assuming the taxpayer is a government hospital.

a. P 300, 000
b. P 270,000
c. P 100,000
d. P 90,000
Problem 9

Private school has P5,000,000 gross income; 60% of this represents tuition miscellaneous fees. It has net
income of P2,000,000, 60% of which was contributed of sources not related to academic instruction.
Compute the total income tax.
a. P 900,000
b. P 440,000
c.P 360,000
d.P 200,000

Compute the total income tax if the school uses all its income for educational purposes.
a. P900,000
b. P 440,000
c. P 360,000
d. P 200,000

Integrated Case 1

The following are the income and expenses of a private school:

Philippines Abroad

Gross profit from educational services P 2,000,000 P 500,000

Dividend from a domestic corporation 40,000 0
Dividend from a foreign corporation - 200,000
Interest income from a bank deposit 30,000 40,000
Interest expense from bank borrowings 100,000 0
Business expenses 1,000,000 280,000
Income taxes paid 150,000 45,000

Required: Compute the tax due assuming that:

a. The foreign taxes are claimed as tax credit
b. The foreign taxes are claimed as deductions

Integrated Case 2

Baguio Medical Center is a non-profit hospital. In 2015,it reported as the following gross income and
expenses:

Activities

Related Unrelated Total

Gross income P4,000,000 P5,000,000 P9,000,000

Directly traceable expenses 3,075,000 3,000,000 6,075,000

Common expenses of both activities 1,125,000

Net income 1,800,000

Required: Compute the tax due assuming

1. The given facts.

2. That Baguio Medical Center is a private hospital
3. That Baguio Medical Center is a government hospital

Integrated case 2
Danumco, a government-owned and controlled corporation, had the following items of income during
the year:
Service charges to clients P8,000,000
Rental of properties 800,000
Interest on bank deposits, net 45,000
Divedend income 50,000
Gain on the sale of stocks directly to a buyer 250,000
Expenses 7,000,000

Required: Compute the following

1. Final tax withheld on the interest income
2. Capital gains income tax due on the sale of domestic stocks
Regular income tax
1. Assuming the given facts
2. Assuming Domunco is a local water district

Integrated case 4

Private school had the following list of transaction during the year:

Tuition fees and assessment P80,000,000

Rentals from various concessionaries 4,000,000
From a parking lot maintained by the school 2,400,000
Interest on saving account and time deposit 1,600,000
Divedend from stocks 400,000

Expenses (10% to senior citizens) 50,000,000

Distribution to pension fund of employees
(40% to prior service cost) 400,000
General and maintenance. 24,000,000
Research and development 24,000,000
Miscellaneous 1,000,000
Contribution to various accredited NPUs. 5,000,000
Contribution to government priority activities 2,000,000

Required: Compute the following

a. Total final tax withheld at source
b. Total gross income subject to regular tax
c. Total claimable deduction
d. Corporate income tax due